Maker’s Mark mistake fuels big Beam profit

Courtesy White Rock Distilleries | BDN

Courtesy White Rock Distilleries | BDN

Workers at White Rock Distilleries in Lewiston, now operated by Beam Inc., inspect some of their product. The company said sales of Maker’s Mark, one of Beam’s high-end bourbons, soared 44 percent after people rushed to buy bottles because of worries the company would lower its alcohol content.

By Martinne Geller, Reuters •May 2, 2013 5:39 pm

A public relations disaster pumped up Beam Inc.’s first-quarter profit.

Sales of Maker’s Mark, one of Beam’s high-end bourbons, soared 44 percent after the company announced it would lower the alcohol content in its bourbon because of a limited supply of whiskey.

A consumer outcry led Beam to quickly reverse that decision, but not before die-hard fans stocked up.

Still, Beam stood by its full-year outlook, saying that some of the factors that helped results earlier in the year will reverse themselves later.

The company said it had benefited from the timing of ingredient costs, selling a higher proportion of more-expensive products, price increases and a shift in advertising spending to the second and third quarters from the first quarter.

The company affirmed its full-year forecast, which called for earnings before one-time items to grow at a high single-digit percentage rate from the $2.40 per share it earned in 2012. It said it still expected 2013 free cash flow of $300 million to $350 million.